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Monday, 25 February 1985
Page: 122

Senator TATE —by leave-I move:

That the Senate take note of the reports.

I will be brief in my remarks. I thought the opportunity should not pass without some comment on the report of the Auditor-General on efficiency audits to do with the Australian Taxation Office. The report raises very serious questions of a gravely worrying kind. One had hoped that the Taxation Office would have adopted vigorous and robust procedures and methods and devised systems to take full advantage of new technology to recover those taxes legally due to the revenue of this nation. However, in the report the Auditor-General comments on serious deficiencies in the Taxation Office system for the checking in particular of dividends and interest disclosed in income tax returns.

There is evidence to suggest that $3.6 billion of dividends and interest are not disclosed in taxation returns in Australia which if subjected to taxation are said to be capable of yielding some $500m a year to our revenues. Of course, when speaking of those sorts of figures one becomes conscious of the fact that new forms of taxation such as will be debated at the taxation summit, and in particular regressive indirect taxation, would not be required, or at least not on the scale envisaged, if the Taxation Office devised a system to enable it to recover these outstanding amounts.

One may also comment that in the Sydney office the Auditor-General found that of 1.8 million individual returns assessed in 1983-84, only six were referred by assessors for further investigation, which seems to be such a minuscule number as to beggar any correlation with reality. One also finds that the Taxation Office does not receive lists of individuals who received interest from savings banks. I must say that I was surprised to read that statement, having thought and acted on the premise that those lists were available to the Taxation Office. The point I am making is that it may be that this chamber should consider the introduction of a withholding tax on dividends and interest payable to Australian residents. At the moment there is a withholding tax payable on dividends to non-Australian residents. It may be that in order to put receivers of this income on some sort of parity with pay as you earn taxpayers, who bear the burden of tax avoidance measures in this country, we should ensure that taxation on interest and dividends is withheld at the point of the bank, building society or distributor of the dividends. I make those few points to point out the grave misgivings which must arise in one's mind as one reads this report. I seek leave to continue my remarks later.

Leave granted; debate adjourned.